Sharpening Your Competitive Anticipation
With 151,000-plus convenience stores competing for nearly $700 billion in sales annually in the United States, today’s competitive landscape is more intense than it ever has been.
While c-store leaders are no strangers to competitive pressures, the current volatile, uncertain, complex and ambiguous (VUCA) environment makes it even more important for organizations to seriously reevaluate their strategies and strengths relative to the competition, or risk becoming obsolete due to industry disruption.
To truly anticipate change and be prepared for what happens next, leaders must look beyond their own industry to scan wider for both emerging and unconventional competitors as industry boundaries and geographic limitations continue to erode.
A new, nimble player with a progressive approach to the traditional c-store business model has the potential to change the industry landscape overnight. Traditional competitors are also evolving as they embrace business model innovations to better serve customers, like offering guest Wi-Fi for commuters and travelers, or upgrading to digital signage and easy-to-use touchscreen technology.
This begs the question: How can c-stores effectively compete amidst a growing pool of rivals and a sea of constant change? How can they become market leaders rather than constantly playing catch-up? The answer lies in learning how to anticipate competitor moves, even in uncertain times.
Surprisingly, "competitive anticipation" is a skill many leaders are lacking. In fact, in our recent assessment of nearly 25,000 executives in more than 175 countries on The Key Elements of Strategic Thinking, we found that predicting competitors’ potential moves and likely reactions to new products or initiatives ranks lowest among leaders’ 36 strategic behaviors. This research is especially eye opening since preparing for, adapting to and capitalizing on future uncertainties requires this vital skill. Leaders must sharpen their ability to anticipate competitor moves today in order to outplay the competition tomorrow, no matter what the future holds.
C-store leaders can start building their competitive strength today by using two proven techniques.
1. Know the competition inside and out
First, take stock of existing competitive intelligence data and collect more from a variety of places beyond your go-to resources. For example, reading blogs or tweets about competitors can give you an inside look at what the market -- and customers -- think about competitors and how they compare to you.
However, while ample data is often available, the key is to centralize, package and interpret this data to “connect the dots” and understand the underlying insight. For example, if a competitor divests a product or service line, is it doing so because it was unprofitable, or is it part of a larger change in strategic direction? Or is this is a weak signal that the product or service line will soon become obsolete? Getting input from multiple, diverse people can often help with this process of making sense of your data, as they can provide valuable insights you may have missed.
After you’ve collected and interpreted existing data, you can take your competitive anticipation to the next level by “walking a mile in their shoes,” as the saying goes. Simulating competitors’ strategic planning efforts by having team members role-play key members of their leadership team in a “war game,” for instance, is a great way to do this. What might on the surface appear to be a competitor’s predictable response might suddenly become less likely once you consider the other priorities that leadership team is dealing with. Insights from the war game help you craft more proactive responses to potential shifts in the competitive landscape, such as how to react if two major competitors merge.
Understanding how competitors’ inner workings will influence future decisions is vital to c-store leaders looking to strengthen their competitive edge.
2. Gauge your execution readiness
What’s the use of having a strategic plan if it can’t be executed when the rubber meets the road? That’s precisely why leaders must assess their organization’s ability to respond.
Start by taking an inventory of the biggest strategic decisions that will arise in both the near and longer term. These could include entering new geographies, or expanding your product or service mix. Then, distinguish which options the organization is prepared to act on and which will require additional resources. For example, if you want to expand your customer relationship management (CRM) software, do you have the technical resources to accomplish this? Will it work with your existing technology, or do you have to massively rework your systems?
After determining your operational readiness to execute on your plan, it’s important to assess the strengths and weaknesses of your team, as there is a direct correlation between human capital and execution feasibility. In many cases, the use of a structured framework can help leaders gain perspective on where each member of the team excels and where they may be lacking.
For example, are they creative in envisioning various solutions, but uncertain when it comes to making a firm decision on what option to pursue? Or, when analyzing a situation, do they look at the root causes of a problem rather than only the symptoms, but have trouble seeing the issue from perspectives other than their own?
Technical knowledge is also important. Do you have the people to be able to manage a CRM software overhaul, or will you have to roll out training programs or even hire a large mass of new talent to execute successfully?
By understanding these nuances, c-store leaders can ensure that their near-term strategy aligns well with their team’s strengths rather than relying on skills that are underdeveloped. By thinking through the technical and human resource implications of their plans, c-store leaders can develop a plan to fill the gaps needed to successfully compete against evolving competitors.
With no way to know for certain what the future holds, gaining and maintaining a competitive edge is difficult -– but it is achievable. By developing the skills needed to proactively anticipate potential market shifts and competitor moves, and in turn developing the internal resources to align with long-term strategy, c-store leaders can strengthen their business strategies to enable their organization to stay a step ahead of the competition.
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.